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Form 216 Operating Income Statement

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Ahcandy

Thread Starter
Freshman Member
Joined
Oct 30, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
Hi all--I received my first request to do an operating income statement. On the form (216) it states that "if the appraiser is retained to complete the form instead of the applicant, then the lender must provide to the appraiser the aforementioned operating expenses, mortgage insurance premiums, HOA dues, etc". Is this required from the lender before the form can be completed? Thanks for any help!
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Hi all--I received my first request to do an operating income statement. On the form (216) it states that "if the appraiser is retained to complete the form instead of the applicant, then the lender must provide to the appraiser the aforementioned operating expenses, mortgage insurance premiums, HOA dues, etc". Is this required from the lender before the form can be completed? Thanks for any help!

They should, they will not, leave that stuff blank and maybe they will comply.
 

Thomas Fiehler

Senior Member
Joined
Jun 2, 2003
Professional Status
Certified General Appraiser
State
Ohio
Don't believe I've ever received a completed form from the lender in 33+ years! (So-don't hold your breath). What I normally do is complete it as best as I can from data in file and just disclose that Client has not provided you with any expense data so it was estimated by using data in office files. Also, be sure to have the data that you reference!
 

StephHigdem

Member
Joined
Jan 5, 2004
Professional Status
Certified Residential Appraiser
State
Idaho
Marshall & Swift are a nice tool for this. You have to dig a little, but it will show replacement cost, typical lifespan, etc. Then you can say "No actual expenses or operation costs were provided to the appraiser. Data source for costs & economic life is the Marshall & Swift Residential Cost Handbook. All quality was considered average, all equipment & structure is estimated to be 5 years old." or something of that ilk.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Don't believe I've ever received a completed form from the lender in 33+ years! (So-don't hold your breath). What I normally do is complete it as best as I can from data in file and just disclose that Client has not provided you with any expense data so it was estimated by using data in office files. Also, be sure to have the data that you reference!

Ditto........................
 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Don't believe I've ever received a completed form from the lender in 33+ years! (So-don't hold your breath). What I normally do is complete it as best as I can from data in file and just disclose that Client has not provided you with any expense data so it was estimated by using data in office files. Also, be sure to have the data that you reference!

Yep, same here (only a little less time, 20+ yrs). Don't even now why those instructions are on the form.
 

incognito

Senior Member
Joined
Jul 14, 2005
Professional Status
Certified General Appraiser
State
Florida
Me either, except of course actual rent and terms of lease. Pretty hard to overlook those two items! If you have a 10 year lease, market rent is pretty irrelevant! :)
 

ghrousseau

Member
Joined
May 5, 2006
Professional Status
Licensed Appraiser
State
Virginia
I have completed many of them but I verify the data with the property owner or management agent. I always noted an EA in the addendum because I could not necessarily review the leases or actual expenses. Most lenders typically ask for them because they are a Fannie/Freddie condition. Underwriters don't even look at them. They are only concerned with the market rents on the rent survey. Underwriters by-pass the 216/op-income by discounting the market rent to 75% of the gross rent when they are calculating ratios. Like I noted...........I've never seen an underwriter ever use one to make a credit decision on the loan. They are pretty much a useless bs loan condition someone asks for because it in the Fannie/Freddie seller guide or because it popped up as a condition on the DU/LP findings. Make sure you charge for it :)
 

Brian Weaver

Senior Member
Joined
Apr 16, 2005
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Illinois
I've found that most appraisers don't know how to properly complete this form. They tend to underestimate expenses, throw in token numbers to fill in spaces...and especially ignore how the form is to be filled out depending on whether there's an owner-occupied unit as opposed to a complete tenant-occupied structure.
 
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